Professor John McHale:

The expenditure benchmark is potentially a constraining aspect of the fiscal rules. For the period to 2016, it is required that expenditure fall by 0.7% of GDP. When we look towards 2016, the Government is very close to that benchmark and its expenditure estimate is slightly above what would be allowed. This shows that there is very little additional room for additional expenditure increases or tax cuts because when we have discretionary changes in taxes, that is counted also. The way it works is that we can increase expenditure beyond the benchmark if we have discretionary revenue raising measures, but when we have discretionary measures that reduce revenue, that is also factored into the calculation of the expenditure benchmark. The situation in respect of the figures for 2016 is very tight and there is no room either for additional expenditure increases beyond those already projected for that year or revenue reducing measures.